Mortgage rates are nearing 7% again, and that is likely to catch the attention of buyers in San Antonio and across South Texas.
The Wall Street Journal recently reported that the average 30-year fixed mortgage rate was 6.76% according to Freddie Mac, while some daily mortgage-rate measurements had already moved above 7%.
The reason goes beyond the Federal Reserve. Mortgage rates are heavily influenced by the bond market, particularly the 10-year U.S. Treasury yield, which recently reached 5%, its highest level since 2007. Concerns about inflation, energy prices and global uncertainty have helped push yields higher.
What Does a 7% Mortgage Rate Mean for Buyers?
For buyers, the biggest impact is purchasing power.
On a $400,000, 30-year mortgage, principal and interest is approximately:
- 6% rate: $2,398 per month
- 7% rate: $2,661 per month
That is roughly $263 more every month without buying any more house.
The Wall Street Journal quoted Mortgage Bankers Association Chief Economist Michael Fratantoni saying:
“A jump in rates like this will certainly cause [prospective home buyers] to pause.”
I understand that reaction. But before automatically deciding to wait, it is worth looking at the entire transaction.
San Antonio Buyers May Still Have Options
In the San Antonio real estate market, buyers may be able to negotiate seller concessions that can help with closing costs or a mortgage rate buydown. New-home builders may also offer financing incentives, depending on the community and current promotions.
For military members and veterans using a VA loan, additional strategies may be worth exploring.
The important question is not simply, “What is today's mortgage rate?”
It is: “Can we structure a home purchase that gives you a comfortable monthly payment?”
That is where having an experienced San Antonio REALTOR® working alongside a knowledgeable lender can make a significant difference. I regularly work with experienced mortgage professionals such as Patrick Fitzgerald with USA Mortgage to help buyers review current financing options, monthly payment strategies, and available loan programs.
If you are thinking about buying a home in San Antonio, Schertz, Cibolo, New Braunfels, or the surrounding communities, I would be happy to help you look at the numbers before you decide whether to buy now or wait.
No pressure. Just good information so you can make the right decision for you.
Fred Wulff, REALTOR®
Top San Antonio Realtor | Military & Veteran Real Estate Specialist
Your Home Is My Mission.